AirAsia company analysisAirAsia is the leading low-cost airline company in Asia. The company provides transportation for passengers and cargo services across domestic and international markets from 97 destinations in 21 countries. It consists of over 8,000 staff and makes up a market capital approximately RM7.06 billion (AirAsia, 2012). AirAsia’s competitors are Malaysia Airlines and other national airlines. AirAsia has five Air operation’s certificates (AOCs) – Malaysia, Thailand, Indonesia Philippines and Japan (AirAsia, 2012). The company has market share for domestic and international, 60 per cent 40 per cent respectively (the star online, 2012). AirAsia has the highest profit margins in the global industry 20 % EBIT (Earnings before interest and tax) margins in 3Q 2012 (Centre for aviation, 2012). According to AirAsia‘s company annual report 2012, Company Net profit and company sale revenues ended 31 December 2011 were RM 553 million and RM 4.5 billion respectively. Thus AirAsia is the leader of low cost airlines in Asia. This essay will focus on Air Asia’s overview business from the past to the current period including origins and key developments. In addition, it will discuss strength, weakness, opportunities and threats analysis of AirAsia. In addition, it will discuss AirAsia’s likely future performance and give recommendations to its future business.

AirAsia was established in 2001 by Dato' Sri Dr. Tony Fernandes and his partners. The company implemented the successful low-cost carrier (LCC) business model which is a basic airline; this business model origins from the successful airlines of Southwest Airlines in Europe and Ryanair in the UK (Poon and Waring, 2010). AirAsia started its first service within Malaysia with two Boeing 737s (Kotler and Armstrong, 2012). In 2002, in order to obtain higher capacity on planes and improved fuel-cost efficiency, AirAsia replaced the existing Boeing B737s with the new Airbus A320s (AirAsia, 2012). Recently,...

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...Company Background and analysis of AirAsia
This report conducts an analysis of AirAsia, the world’s Lowest Cost Airline. AirAsia is a Malaysian low cost airline. AirAsia was found in 1993 and it started its operations from 18 Nov 1996. It was established initially by DRB-Hicom, a government owned- conglomerate. On 2 December 2001, the heavily- indebted airline was purchased Tony Fernandes former Time Warner Executive.
Tony was inspired by the Low-Cost Carrier business model of Southwest Airlines and proposed to start a Low-Cost Carrier but the government refused to issue a new license and requested Tony to buy an existing airline. Hence Tune Air set up by Tony and his investors bought Air Asia for a token sum of RM1.
Before 2001. AirAsia failed to attract enough passengers from Malaysia Airline to establish its own stand in the market. The turning point for AirAsia was in 2001 subsequent to its purchase by Tony Fernandes. Tony Fernandes enrolled low-cost airline experts to restructure the business model of AirAsia. He invited Connor McCarthy, formerly the director of the group operation Ryanair, to join his executive team. In the late 2001, AirAsia airline was re-launched in Malaysia as trendy, no-frills operation with three B737 aircraft as a lowfare, low-cost domestic airline.
AirAsia’s simple slogan...

...CompanyAnalysis: AirAsiaAirAsia is one of the best low-cost airlines in the world. It sets twelve hubs in Malaysia, Thailand, and Indonesia. (AirAsia,??)The company employs more than 8,000 staff. The company still has ordered 475 aircrafts and 114 had been already delivered. (The Business Times Singapore, 2013) By the 2013, it owns 117 aircrafts and 87 per cent of them are in a balance which is the highest rate among all the airlines in Asia. (The Business Times Singapore, 2013) AirAsia now flies 132 routes which cover 65 destinations in 18 countries and over a decade operation it has serviced over 180 million passengers. (Malaysian Government News, 2013) Although AirAsia is so successful, its competitors such as Air Deccan, Cebu Pacific, and Tiger Airways are not far behind. (Coursebook)
In 2001, a young Malaysian government-linked airline, AirAsia, was bought by Tony Fernandes and his three partners. (Coursebook) As its powerful competitor, Malaysia Airline System, had already dominated the domestic high-end market, the company decided to focus on the domestic low-cost market. (Coursebook) To achieve its low-cost target, the company applied the budget, no-frills airline policy and this was the first time for Asia airlines. (Coursebook) In 2003, the Malaysia government signed an open-skies agreement...

...of an internal and external analysis of AirAsia using various methods including a PEST, Organization analysis, SWOT analysis and Porter’s 5 forces model. The main outcomes of the report are:
1.1 Conclusions reached:
1.2 Recommendations reached:
2. Introduction
The company chosen for this report was AirAsia. The assignment required that:
• A management report of 3,500 to 4,000 words is written on an organization. The report should describe, analyze and assess the impact of external and internal factors on the organization and evaluate the organization’s responses
• In relation to technological change, analyze how it influences policies and decision making, critically evaluate the effectiveness of the organization and recommend areas for improvement in response for the organization.
The company has been analyzed using the aforementioned procedures and tools; and conclusions and recommendations have been reached from these tools.
3. Background to AirAsia
3.1. Organization Definition
A ‘no-frills’ airline is defined as one “That uses charter and/or scheduled flights to offer bargain-basement fares. Budget airlines usually land at and take-off from secondary airports, do not provide in-flight meals or refreshments, and may not even offer numbered seat allocation. Their ticket prices are fixed and non-refundable in case of a cancellation or no-show”. (i)...

...BDB 1303 – PRINCIPLES OF MARKETING
ASSIGNMENT 3
COMPANY CASE
AIRASIA: THE SKY’S THE LIMIT
NAME STUDENT ID PROGRAMME
WONG CHOO YEN SCM 016372 DIPLOMA IN ADVERTISING DESIGN
GEUAN KHIM KOOI SCM 014562 DIPLOMA IN ADVERTISING DESIGN
LEE JIA YAN SCM 015157 DIPLOMA IN GRAPHIC DESIGN
DATE: 10 OCTOBER 2012
LECTURER: MS. MAZLIZA ISMAIL
Table of Contents
Introduction 3
Questions for Discussion
1. What are the micro and macro environmental factors that have contributed to the early success of AirAsia? 4
2. Discuss the micro and macro factors that would affect AirAsia’s performance in the
current competitive environment described in the case? 7
3. By focusing on low prices, has Airasia pursued the best strategy? Why or why not? 9
4. Given AirAsia’s current situation with bigger competitors following its business model, what other recommendations would you make to CEO Tony Fernandes for the future of his company? 10
Introduction
Questions for Discussion
1. What are the micro and macro environmental factors that have contributed to the
early success of AirAsia?
Microenvironment
Micro environmental factors deals with the actors that are close to the company that affect its ability to serve its customers – the company, suppliers, marketing intermediaries, customer markets, competitors and...

...﻿2.0 Planning and Strategic Management
2.1 SWOT Analysis
Strengths
Low cost operations
AirAsia Berhad is the first airline company that offered a low cost flight in Asian market. By operating the low cost principle, AirAsia Berhad aim to maximize their sales and minimize their operating cost. Based on their slogan “Now Everyone Can Fly” have fulfilled the wants for those passengers who choose to fly with low cost airlines especially students, those family with lower income and low income earners. Therefore, it can increase the demand of travelling.
Extensive of E-Commerce
AirAsia Berhad has the benefit for selling off their seats through internet network and telephone booking. AirAsia uses Navitair’s Open Skies computer reservation system (CRS) which is a web-based sales and inventory system linked to AirAsia’s call centre and allow the customers to print out the boarding pass. This shows that they are efficient and effective towards their company. Since AirAsia has limiting the agents’ commission, so about 85 per cent of AirAsia flight ticket is sold through online booking .Therefore, they can reduced the cost by promoting their organization hence it can be reduced the intermediary cost.
Flexible Air Schedules
AirAsia Berhad increases the frequency of their flight every year to fulfill the needs of...

...﻿1.0 Introduction of AirAsia
In Malaysia, there are 3 main airlines which are Malaysian Airline (MAS), AirAsia, and Firefly. AirAsia Berhad is starting its operation in November 2004, which is listed on the main board of Bursa Malaysia. It start developing a low cost airline model (LCC) in Asia since 2001, it has grown from a domestic flight in Malaysia for more than 55 destinations served for 5 leading airline hub in Malaysia which are ThaiAirAsia, Indonesia AirAsia, Philippines AirAsia and Japan AirAsia. AirAsia Group is one of the lowest cost airlines in aircraft size and the number of passengers it can load.
2.0 Air Asia
AirAsia is the Malaysia’s low-cost airline. It operates the local and an international flight is planned and is a lowest cost airline in Asia without any addition service. As a cheapest airline, AirAsia is a pioneer in Asia. This is also the first airline in global to achieve full flight tickets and distributed seats. However, by 5 February 2009, AirAsia has implemented distributed seats on all flights of AirAsia affiliates airlines. The main base is at the Kuala Lumpur International Airport (KLIA) and Low Cost Carrier Terminal (LCCT). AirAsia’s registered office is in Petaling Jaya, Selangor, and its headquarters in KLIA, Sepang, Selangor. AirAsia won the Best Low...

.......................3
SWOT ANALYSIS FOR AIRASIA.............................................................3
* Strength
* Weakness
* Opportunities
* Threats
LIST OF REFERENCES...........................................................................6
AirAsia’s Background
AirAsia was previously owned by DRB-Hicom, a government-linked company. Its airline had not been able to take off and was eventually sold to Tune Air Sdn. Bhd in 2001 which are owned by Tony Fernandes and four entrepreneurs, for a token sum of RM1.00 together with an accumulated debt of RM40 million.
AirAsia was listed in the Kuala Lumpur bourse within three years of operation, on 22 November 2004, with one of the largest IPO offer of RM717.4 million.
Through the corporate philosophy of “Now Everyone Can Fly”, AirAsia has sparked a revolution in air travel with more and more people around the region choosing budget airline as their preferred choice of transport.
SWOT ANALYSIS FOR AIRASIA
STRENGTHS
* AirAsia has a strong management team and strong connections with the government and airline industry leaders.
This is partly contributed by the diverse background of the executive management teams which consists of industry experts and ex-top government officials. For example, Shin Corp. (formerly owned by the family of former Thai...

...1.0 Introduction
Purpose
The purpose of this analysis is to conduct an environmental analysis in the context of AirAsia's international business operations, describing the major variables involved and the impact of the specific threats and opportunities confronted by AirAsia besides that, this analysis also helps to identify AirAsia's competitive strategy and analyse how the strategy is implemented to gain competitive advantage.
Background on AirAsiaAirAsia was set up by Dato' Tony Fernandes in 2001. In December 2001, Fernandes and his partners set up Tune Air Sdn Bhd (Tune Air), an airline holding company then bought over AirAsia. Now, AirAsia has become one of the most successful airlines in the Southeast Asian region and the pioneer of low cost and no frills travel in Malaysia. The airline now flies to over 40 destinations in Malaysia, Thailand, Indonesia, Macau, China, Philippines, Cambodia, Vietnam and Myanmar. AirAsia has formed 2 successful joint ventures in Thailand through Thai AirAsia, and Indonesia through AWAIR. Starting from 2 aircraft till now AirAsia owns 28 and has carried more than 223 millions guest through its low fares travel.
2.0 External Environment Analysis
2.1 Political
Flying outside Malaysia is difficult. Bilateral agreement is one of the obstacles...